If you’re a long-term customer of a major bank with a mortgage and you’re paying their standard mortgage rate, then you’re likely paying a loyalty tax.
That’s because new customers to your bank will be offered a lower interest rate than the one being paid by the bank’s longer-term customers.
There are many things about the behaviour of the major banks that are disturbing – but few things annoy me more than their policy of providing the best loan deals to new customers, while refusing to offer the same terms to their existing, long-term, loyal customers.
There are far too many Australians who feel it’s right to stay loyal to the major institution they’ve banked with for years.
But the reality is, your loyalty is not being reciprocated by the bank.
You’re loyal to them but they’re not showing any loyalty to you.
They’re in fact banking on you staying put, even though they’re treating you with contempt.
The reality is that the major banks believe we’re all gullible fools and their business strategy on interest rates is based on this belief.
However, more and more Australian consumers are refusing to accept this kind of treatment and are voting with their feet.
ABS data shows that, in November, the level of people re-financing their mortgages was at the record levels.
There was a 9% month-on-month increase in re-financing and a 30% yearly increase, as more and more Australians switch banks to get the best deals which are available only to new customers.
A survey by Mortgage Choice shows that Australians are now less likely to accept the treatment dished out by the banks and to continue paying their loyalty tax.
The survey shows that most people are aware they are not receiving the best interest rates deals available from their bank and the vast majority are considering switching to another lender to get a better deal.
I urge people to consider becoming part of the growing re-financing trend.
Don’t pay the loyalty tax. If your lender won’t give you the best interest deal that’s on offer for new customers, then switch to a new lender and get the lowest interest rates available.
